Iran war causing 'very significant' growth downgrade - IMF's Gourinchas

• Global growth forecast downgraded by 0.3 percentage points to 3.1% for this year due to the war's negative supply shock.
• A severe scenario could lead to global growth of only 2% (a level seen during severe crises) and 6% inflation if the conflict extends and inflation expectations become unanchored.
• Central banks should 'see through' the immediate supply shock but must step in decisively if inflation broadens, becomes more persistent, and leads to wage-price spirals.

The IMF's Chief Economist discusses a "very significant" downgrade to global growth forecasts, from 3.4% to 3.1% this year, due to the war (referring to the Ukraine conflict despite the interviewer's phrasing). He warns of a severe scenario with 2% global growth and 6% inflation if the conflict persists and inflation expectations de-anchor, urging central banks to act decisively if inflation broadens.